It's like how brave the soldiers are, and it can be raises and lowered due to certain spells and Sov characteristics. When it is low, your soldies can panic and not fight back. Not sure a really high one does anything.
Frankly it doesn't do much in this game, occasionally a monster or something will cast confusion & your guy will lock up, but that's about it. Morale in Dominions III had a much greater effect. It was actually kool to see entire legions break & flee from the battlefield .. that's how to model moral effects in combat!
Guys should reach a certain breaking point & just flee which means no longer under player control, it just doesn't happen in this game, morale is pretty much broken as I see it in this game.
